Packet Exercise 6.3 Given Info for Keats Corporation: Accounts receivable, 12/31/2020 Allowance for doubtful accounts, 12/31/2020 before the entry to record the 2020 Bad Debt Experise Sales for 2020 (assume all on account) $125,000 $5,000 credit balance $375,000 AR Aging Method Calculate the ending balance in the allowance for doubtful accounts using the AR Aging method. Keats Corp. prepared the following aging report of the 12/31/2020 accounts receivable balances. Age of AR Invoices Less than 3 months 3-6 months 6-12 months Total AR Balances at 12/31/2020 $ 65,000 $ 40,000 $ 20,000 $ 125,000 Estimated % uncollectible 2% 25% 90% Estimated amount uncollectible $ 1,300 $ 10,000 $ 18,000 $ 29,300 Accounts Receivable (12/31/2020) 125,000 Bad Debt Expense Allowance for Doubtful Accounts 5,000 (12/31/2020) Questions: 1. What entry is made to record the bad debt expense? 2. What is AR, net at 12/31/2020? $ 3. Does the balance in the Allowance account affect the Bad Debt Expense journal entry? Yes No a. What is bad debt expense if the allowance balance was $20,000 (credit) before the end of year analysis? $ b. What is bad debt expense if the allowance balance was $10,000 (DEBIT) before the end of year analysis? $ 4. What could cause the allowance account to have a debit balance? 5. How did the company determine the estimated uncollectible % used in the above analysis